The Covid crisis has forced the government to take steps to reinvigorate economy realistically rather than banking on populist measures. The pandemic offers an opportunity to reform our economy and make it globally competitive in the long-term. There are many factors that favour India: Economic crisis in the United States and global disenchantment with China should be considered while the country puts in place its revival plans. The pandemic has exposed the vulnerabilities of the Capitalist and Communist economies. Although China follows a Communist form of governance, its policies are pro-market.
India’s antiquated labour laws are a key reason why it is lagging behind even smaller countries like Vietnam in areas of manufacturing and exports.
As far as India is concerned, out of its 1.35-billion population, 60% is treated as the productive manpower which is the world’s highest. It is even higher than China’s numbers. About 15% of the total productive manpower in India is migrant labourers. The Covid pandemic turned the spotlight on the plight of migrant labourers. All segments of the society, including governments, private and public sectors, are worried about the condition of migrant labourer for various reasons. Uttar Pradesh and Madhya Pradesh governments by initiating labour reforms have made their states more attractive to investors and sent a strong signal to other states to follow. The Narendra Modi Government initiated the codification of 44 labour laws into four codes, which is also a major step towards Ease of Doing Business. Making laws is something but implementing them involves strategy and political will.
India’s antiquated labour laws are a key reason why it is lagging behind even smaller countries like Vietnam in areas of manufacturing and exports. Vietnam’s GDP grew faster than India’s. India’s labour laws neither protect jobs nor workers. And it does not allow flexibility to employers to lay off workers in a downturn. As a result, Indian companies avoid permanent hiring to keep away from the troubles of the labour laws. While reforming its senseless labour laws, India needs to establish a labour welfare scheme for skill-based training to eradicate unemployment.
the need of the hour is a pragmatic approach characterised by better livelihood options and affordable healthcare facilities and not solutions like ‘One India, One Wage’.
Why labourers have to leave their home state in search of jobs? Labourers from Bihar are working in UP, while labourers from UP labourers are working in Delhi and Haryana. A huge numbers labourers from Odisha are toiling day in and day out in Telangana. Definitely, this is not because of labour shortage. There are three reasons for the emergence of this situation: reliability, consistency and cost effectiveness. Employers prefer migrant labourers over native workers because the former is more reliable, consistent and cheap. Moreover, migrant labourers are easy to handle. Therefore, the need of the hour is a pragmatic approach characterised by better livelihood options and affordable healthcare facilities and not solutions like ‘One India, One Wage’.
With flight of migrants, manpower crunch will be a major problem the companies will be facing in the immediate future. There is a need for greater elasticity at this occasion, which the MP and UP governments have responded to. That said, one of the most critical constituents of the economic activity is the wellbeing and security of the workforce that enables higher productivity and success. Highly educated, skill based productive states like Kerala should think on these types of reformation, since their main income source of remittances is going to come down in a big way.